Troubles deepened Tuesday for Imax Corp. as the giant-screen film company was hit with a U.S. class-action lawsuit by shareholders over allegedly “false and misleading” financial statements.
Law firm Chimicles & Tikellis LLP filed the suit on behalf of Michael J. LaRosa, alleging that in the fourth quarter of last year the company recognized revenue from Imax screens that were not yet opened.
The law firm says the movie company concealed truth, failed to inform shareholders of material information and “caused the company’s securities to trade at inflated prices” after they bought the shares.
The suit also alleges the company planned to artificially boost its financial results to attract a sale or merger.
The lawsuit was filed at a U.S. District Court in New York by shareholders who purchased or acquired shares between Feb. 17 and Aug. 9. Also named in the suit were co-CEOs Richard Gelfond and Bradley Wechsler and former chief financial officer Frank Joyce.
Imax declined to comment on the pending suit.
“There’s nothing more we can say because we haven’t been served with a complaint,” said company spokeswoman Sarah Gormley.
Over the past few weeks, legal troubles for the Toronto-based company have widened while it searches for potential buyers or partners.
On Monday, Joyce resigned as CFO less than two weeks after the company became the focus of an informal accounting probe by the U.S. Securities and Exchange Commission. That investigation involves the same quarter that the lawsuits target.